Many of us regularly donate to charity in order to do good. From rare diseases to abused animals and cancer research, each year we donate around £10 billion to a diverse range of causes such as homelessness, cancer research and animal abuse. In the US, donations are as high as US$358 billion.

A decline in trust is perhaps unsurprising in light of such negative, high-profile stories. It is important to remember that the majority of the public still consider most charities to be trustworthy, but that doesn’t mean we should be complacent – and we ought to be concerned by any decline in the reputation of the charitable sector.

Any organisation that relies on donations generates an information gap between those who fund its activities and those who benefit from them, which makes it difficult for us to judge the extent to which our donations are put to effective use or make an independent assessment of their quality. This information gap can be exacerbated by geographical considerations, as with a charity that provides disaster relief on the other side of the world, and also by time, as when a charity accumulates reserves to spend at some future time. Certain charitable services, such as the provision of education or social welfare, can also be difficult to evaluate meaningfully on anything other than a long-term basis, regardless of whether they are funded by donations or by charging fees.

This is why the law subjects charity trustees to a range of duties designed to prevent abuses of power, such as the duty to account for the stewardship of the charity’s assets, the duty to participate actively in the charity’s management, and the duty to plough any profit back into the charity’s services and not distribute it to private hands. There is also an overarching duty to act only in the best interests of the charity in the course of their trusteeship.

However, this does not mean that trustees always behave and safeguards are only effective if trustees are held to account when they breach them. But the information gap can mean that donors with an incentive to seek redress against breaches of duty are unaware when they occur. The regulatory agency, the Charity Commission, can investigate suspected breaches and take corrective action, although it has been criticised in some quarters for being slow to act when concerns are raised, as in the recent case of the Cup Trust.

In the case of fundraising, there is also legislation regulating the conditions under which professional fundraisers are permitted to solicit donations on behalf of charities, and if the current charities bill becomes law this will be expanded so that the public, and vulnerable people in particular, are shielded from aggressive tactics and unreasonable intrusions into their privacy.

Rules and regulations, though, are a double-edged sword. Some oversight is desirable but charities must remain independent from government interference if they are to offer the public a meaningful alternative to services provided by the public sector. They must also remain free to innovate, even if this carries with it a possible reputational risk. It was the charitable sector that gave us the first schools, the first public libraries and the first hospitals: we cannot know what other firsts we will miss if charitable activity is overly stifled by the regulatory framework in which it operates. But this should not distract us from the importance of regaining the public’s trust in charities: a sustained decline would be at the expense of the sector’s effectiveness and would leave society poorer for it.

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